WINTEL 1

THE GLOBAL ECONOMIC & CULTURAL CONTRIBUTION

OF THE INDEPENDENT RECORD INDUSTRY

WINTEL
WORLDWIDE
INDEPENDENT
MARKET
REPORT 2018
2
WINTEL 3
4

THE CURRENT WIN TRADE ASSOCIATION

ABOUT WIN
MEMBERS ARE:

A2IM US
ADISQ CANADA
ABMI BRAZIL
AIM UK
AIR AUSTRALIA
AMAEI PORTUGAL
ASIAR ARGENTINA
AUDIOCOOP ITALY HENRIETTE HEIMDAL PROJECT MANAGER, WIN
BIMA BELGIUM
The Worldwide Independent
CIMA CANADA Network (WIN) is the coordinating
body for national independent
DUP DENMARK trade associations representing the
recorded music industry around
IMCJ JAPAN the planet. Launched in 2006 in
response to global business, creative,
FONO NORWAY and market access issues faced
IMI CHILE CHILE by the independent sector, WIN
collectively advocates, instigates,
IMPALA EUROPE and facilitates for its membership.

IMNZ NEW ZEALAND

INDIECO FINLAND
INDIESUISSE SWITZERLAND
LIAK SOUTH KOREA
PIL ISRAEL
PLATFORMA CZECH REPUBLIC IN ADDITION TO THE NETWORK OF
PMI ITALY ASSOCIATIONS, WIN HAS A NETWORK
OF LOCAL REPRESENTATIVES FROM
RUNDA BALKANS TERRITORIES WHERE THERE IS CURRENTLY
SOM SWEDEN NO TRADE ASSOCIATION, INCLUDING:

STOMP NETHERLANDS CARIBBEAN NIGERIA

UFI SPAIN CHINA POLAND
UPFI FRANCE INDIA ROMANIA
VTMOE AUSTRIA IRELAND SOUTH AFRICA
VUT GERMANY MALAYSIA VIETNAM
WINTEL 5

FOR MORE INFORMATION PLEASE VISIT: WIN GRATEFULLY ACKNOWLEDGES

THE ASSISTANCE PROVIDED BY
MIDIARESEARCH.COM
MUSICALLY.COM
WINFORMUSIC.ORG
EVERYONE WHO HAS CONTRIBUTED
TO WINTEL 2018

DESIGN BY OSTREET.CO.UK MIDIA RESEARCH MUSIC ALLY

MIDiA Research is a boutique media Music Ally is a knowledge company.

and technology analysis company. We have more than 15 years worth
of information, experience and data
Mark Mulligan is the Managing
on the global music business.
Director of MIDiA Research and a long
term media and technology analyst Our daily news and weekly insight
and a leading thinker on the music briefings cover markets, technologies,
industry’s digital transition. Mark has trends and viewpoints that are
15 years of media business analysis shaping the modern industry. We are
and consulting experience, working also the leading training provider
with leading global media, technology on digital growth and development
and device companies. Mark heads up in the music industry, and work
MIDiA’s music research and oversees with artists, labels and managers
all of MIDiA’s research output. Mark is at all levels on digital marketing
the author of the industry leading blog strategy and campaign execution.
Music Industry Blog. He is also author
We also organise and run our own
of ‘Awakening: The Music Industry In
events, including the Sandbox Summit
The Digital Age’ the definitive account
music-marketing conferences,
of the rise of the digital music market.
and (in partnership with Music Biz)
Karol Severin is MIDiA’s lead analyst the NY:LON Connect conference
for research on the mobile content in London and New York.
economy. Karol’s research covers
all aspects of mobile content
including the mobile app economy,
freemium strategy, mobile consumer
segmentation, payment tactics and
mobile discovery. Prior to joining MIDiA
Karol gained experience in a number
of marketing and research roles and
as a technology start up founder.
Karol is based in their Berlin office.
6

CONTENTS
4 38
THE FUTURE IS BRIGHT FOR
ABOUT WIN INDIES ON SPOTIFY
JEN MASSET

7 INTRODUCTION
ALISON WENHAM 44 WHAT AN INDEPENDENT
LABEL LOOKED LIKE IN 2017

8 46
BREAKING BORDERS: INDIE
KEY FINDINGS INTERNATIONAL SUCCESS
STUART DREDGE

10
INDEPENDENT
MARKET ANALYSIS
STUART DREDGE 54 CONCLUSION
ALISON WENHAM

16
MERLIN TURNS 10 AND
LOOKS AHEAD
STUART DREDGE 55 METHODOLOGY

23 CASE STUDY:
CIGARETTES AFTER SEX 56 MODEL DATA

29
TALKING TO POWER: WHY THE
INDEPENDENT VOICE MATTERS
STUART DREDGE
WINTEL
INTRODUCTION
As 2018 draws to a close, we are
delighted to publish the third edition
of WINTEL which maps the global
market share of the independent
recorded music sector using copyright
ownership rather than distribution
as the measurement criteria.
2017 established the highest market
share for the sector since the early
nineties when scores of independent
companies were acquired and
removed from the indie sector.
Increasing from around 20% in 1998
to 39.9% in 2017, during the most
turbulent period of the industry’s
history, is an astonishing achievement.
As always we make the case that
measuring music industry market
share by copyright ownership
continues to be the most legitimate
method as distribution is
interchangeable and involves only a
modicum of risk, whereas investing
in the creation of a copyright in the
first place is the biggest risk that
any artist or music entrepreneur can
take. Getting it to market is thereafter
a question of choice for the artist.
Choice is now the most defining
feature of the global music industry—
artists have every imaginable route
to their fans, from direct uploads to
full service contracts, but what is
clear from the report is that once an
artist has signed to an independent
label, they choose to stay.
7
ALISON WENHAM CEO, WIN
An average of 76% of artists choose
to renew their contracts with their
independent record company. This
is a sure sign of a successful and
enduring creative partnership as well
as a successful business alliance.
Also causing the global industry
to sit up and take note in 2018
is the rapid rise of the so-called
emerging markets with China
enjoying a 36% rise in revenue
growth , Asia & Australasia seeing
a 5.4% spike in revenue and
streaming growth of 38%, while
Latin America powers ahead with
overall growth of 17% and an almost
50% rise in streaming revenues.
The speed at which these markets are
gaining influence both commercially
and culturally has surprised everyone
and independent companies have
played and continue to play a major
role is what is a hugely positive
development for the global industry.
In conclusion it has been another
challenging twelve months for our
industry on a numberr of levels but
we have emerged with powerful new
legislation to protect our interests,
fantastic growth in some unexpected
territories and increasing support
from music fans who have continued
to enjoy and engage with the
amazing music coming out of the
worldwide independent community .
8

KEY
IN ORDER TO TAKE THE PULSE OF THE
GLOBAL INDEPENDENT RECORD LABEL
MARKET WIN COMMISSIONED MIDIA TO

FINDINGS
CONDUCT A MAJOR GLOBAL SURVEY OF
INDEPENDENT LABELS ACROSS THE WORLD.

(MORE DETAILS ON THIS SURVEY CAN BE

FOUND IN THE METHODOLOGY SECTION
AT THE END OF THE REPORT).

INDEPENDENT LABEL GROWTH 2017 MARKET SHARE

INDEPENDENT LABELS GLOBAL MARKET SHARE

SAW A 11.3% YEAR-ON-
YEAR GROWTH

THE REST OF THE INDEPENDENT LABELS

MARKET, ONLY SAW A MARKET SHARE 2017*
10.2% GROWTH.

*AN INCREASE FROM 38.4% IN 2016

DISTRIBUTION GROWTH IN STREAMING REVENUE

22.4%
OF INDEPENDENT REVENUE
DISTRIBUTED BY MAJORS
THE INDEPENDENTS SAW A 46% INCREASE IN STREAMING REVENUES.
WINTEL 9

ARTIST LOYALTY ARTIST LOYALTY

77% % OF ARTISTS RENEWING

WITH THEIR LABEL
(BY COUNTRY)
OF ARTISTS
CHOOSE TO
RENEW THEIR
CONTRACTS WITH
INDEPENDENT
LABELS

ARTIST DIRECT REVENUES GLOBAL INDEPENDENT MARKET SHARE

ARTISTS DIRECT INDEPENDENTS ARE

$101M
POWERHOUSES IN
REPRESENT JAPAN AND
SOUTH KOREA
IN 2017

UP FROM $94M IN 2016

OVERSEAS INDEPENDENT REVENUES

31%
OF INDEPENDENT
REVENUES COMES
FROM OVERSEAS
10

THE GLOBAL
THIS YEAR’S WINTEL REPORT IS BASED ON
THE MOST COMPREHENSIVE SURVEY YET OF
THE ANNUAL MARKET SHARE OF THE

INDEPENDENT
GLOBAL INDEPENDENT SECTOR.

THIS PIECE IS AUTHORED BY STUART

DREDGE, WITH DATA INSIGHT FROM

SECTOR IN NUMBERS
MARK MULLIGAN OF MIDIA.

WRITTEN BY STUART DREDGE

Based on respondents from North
America, Latin America, Europe and
Asia who represent between them
annual revenues of $1.9bn, the survey
includes companies whose revenues
range individually from less than
$1k a year to more than $300m.
The findings tell a clear and powerful
story: independents are the fastest-
growing sector of the global recorded
music industry; they are benefiting
from the industry’s transition from
sales to streaming, and the loyalty
they see from consumers, employees
and artists alike demonstrably shows
the respect and moral authority they
command, at a time when fairness and
transparency has never been more
important, nor more talked about.

Stuart Dredge

Mark Mulligan
WINTEL 11

INDEPENDENT LABELS OUTPERFORMED THE MARKET IN 2017

INDEPENDENT LABELS SAW A

11.3% YEAR-ON-YEAR GROWTH

THE REST OF THE MARKET, ONLY

SAW A 10.2% GROWTH.

WINTEL /MIDiA Research Independent Market Share Model (07/17)

THE FINDINGS TELL A CLEAR Independent labels grew from $6.2bn

in 2016 to $6.9bn in 2017, which was
growth of 11.3% year-on-year. What’s

AND POWERFUL STORY: important about that figure is that

indies outperformed the overall music
market, which grew by 10.2% last year.

INDEPENDENTS ARE THE Independents also increased their

total market share to 39.9% in

FASTEST-GROWING SECTOR
2017 with their growth outpacing
that of the major labels, whose
revenues grew by 9.7% that year. 

OF THE GLOBAL RECORDED

MUSIC INDUSTRY
12

MEASUREMENT OF THE MARKET BY OWNERSHIP NOT DISTRIBUTION

22.4%
OF INDEPENDENT REVENUE
DISTRIBUTED BY MAJORS

WINTEL /MIDiA Research Independent Market Share Model (07/17)

Nearly $1.5bn of independent label
revenues came from labels and
artists whose music was distributed
by the major labels—through their
in-house distributor and label-
services divisions (Caroline for
Universal, The Orchard for Sony
Music and ADA for Warner Music).
Some industry metrics count these Major-distributed independent music
revenues within the major labels’ accounts for 8.6% of the total market,
market shares, but WIN believes that and 22.2% of the independents’
it is vital to measure the market not market share: it’s a significant sum
by who distributes music, but by who that should be assigned accurately.
owns it: when independent labels
shoulder the risk of signing artists
and investing in their music, it should
count towards their market share.

MAJOR-DISTRIBUTED INDEPENDENT
MUSIC ACCOUNTS FOR 8.6% OF THE
TOTAL MARKET, AND 22.2% OF THE
INDEPENDENTS’ MARKET SHARE
WINTEL 13

STREAMING REVENUES ARE GROWING STRONGLY

THE INDEPENDENTS SAW A 46% INCREASE IN STREAMING REVENUES.

WINTEL /MIDiA Research Independent Market Share Model (07/17)

By the end of 2017, 176 million
people were using music-streaming
subscription services globally,
according to the IFPI, which was up
by 64 million on 2016. This growth in
streaming—and in paid streaming—is
great news for independent labels.
Independent streaming revenues
grew by 46% in 2017 to $3.1bn, and
now account for just under 44% of the
sector’s overall income, compared
to 33% in 2016. We’re approaching
a tipping point—perhaps even this
year—when streaming will represent
more than 50% of revenues.
This growth is no accident:
independent labels have been quick to
adjust their businesses to streaming.
47% say that streaming makes their
cash flow easier, but that rises to 73%
for labels where streaming is already
more than 30% of their revenues.
These figures also hint at another
encouraging trend for independent
labels: that their investment in artists’
long-term development, and in the
album format, is an advantage rather
than a risk in the streaming era. While
major labels expend considerable
marketing resources to break
individual tracks, indies are investing
for the long term: and are developing
sustainable businesses as a result.
14

INDIES’ INTERNATIONAL HORIZONS ARE EXPANDING

31%
OF INDEPENDENT
REVENUES COMES
FROM OVERSEAS

WINTEL /MIDiA Research Independent Market Share Model (07/17)

THE AVERAGE INDEPENDENT LABEL The big, global music-streaming

services are providing independent
music with easier access to listeners

NOW GETS 31% OF ITS REVENUES around the world, and that’s showing
in their day-to-day businesses.

FROM OVERSEAS, COMPARED TO

The average independent label
now gets 31% of its revenues
from overseas, compared to 69%

69% FROM THEIR HOME MARKET.

from their home market. Note,
this can vary according to the size
of the label: some of the larger
independent companies now get
well over half of their revenues
from international markets.
WINTEL 15

INDEPENDENTS ARE POWERHOUSES IN JAPAN AND SOUTH KOREA

WINTEL /MIDiA Research Independent Market Share Model (07/17)

Globally, the independent

market share was 39.9% in 2017,
but unsurprisingly this varies
IN JAPAN, INDEPENDENT MUSIC
between individual countries,
from 15.6% in Spain to 37.8% in
Brazil. But two countries stand
COMPANIES ACCOUNTED FOR 63.7%
out: Japan and South Korea.
In Japan, independent music OF THE MARKET IN 2017, WHILE IN
SOUTH KOREA THEY TOOK AN EVEN
companies accounted for 63.7%
of the market in 2017, while
in South Korea they took an

LARGER SHARE: 89.2%.

even larger share: 89.2%. 
16

ARTISTS ARE LOYAL TO THEIR INDEPENDENT LABELS

77%
OF ARTISTS CHOOSE TO
RENEW THEIR CONTRACTS
WITH INDEPENDENT LABELS

ARTISTS RENEWING BY COUNTRY

WINTEL /MIDiA Research Independent Market Share Model (07/17)

One of the most heartening statistics
from this year’s WINTEL survey
concerns the 76% of artists who
choose to renew their contracts
with independent labels when they
expire. That’s a reflection of the hard
work that those labels have put in
to help those artists develop their
talent and reach their audience.
It’s also a reflection of stability
within the teams at these labels
who are working with artists. Based
on this year’s survey, 42% of staff
at independent companies have
been there since the launch of the
label – and bear in mind that the
average label is 14.9 years old.
The survey also offers a snapshot of
the modern independent label: the
average is 13.6 full-time staff, 3.2
part-time staff and 97.6 artists in
their catalogue. This latter statistic
is relevant to the positive impact that
streaming is having on independent
businesses: a strong catalogue
can build sustainable revenues.
WINTEL 17

ARTIST DIRECT REVENUES ARE INCREASING STEADILY

ARTISTS DIRECT REPRESENT

$101M* IN 2017

*UP FROM $94M IN 2016

WINTEL /MIDiA Research Independent Market Share Model (07/17)

WIN CAN REVEAL, BASED ON THE The definition of what we consider

to be ‘independent’ is evolving in
the modern music industry: besides

LATEST CALCULATIONS BY MIDIA labels, it also now encompasses

artists who are self-releasing their
music through distributors. The

RESEARCH, THAT ARTIST DIRECT creative and commercial explosion

of the grime genre, for example, has
been underpinned by this model.

REVENUES GREW FROM $94M IN WIN can reveal, based on the latest
calculations by MIDiA Research, that

2016 TO $101M IN 2017.

Artist Direct revenues grew from
$94m in 2016 to $101m in 2017.
As these artists build teams
around them to fulfil various
label-like functions, this section
of our community looks set
to continue its growth.
In conclusion, another year of solid
and impressive growth augurs well
for the future of a sector that is
expanding globally in every way.
18

MERLIN
INDEPENDENT LICENSING AGENCY
MERLIN CELEBRATED ITS 10TH BIRTHDAY
EARLIER THIS YEAR, ANNOUNCING THAT

TURNS 10 AND
IT HAD DISTRIBUTED MORE THAN $1.5BN
TO ITS MEMBERS SINCE LAUNCHING IN
2008—WITH $500M OF THAT COMING IN
ITS LAST YEAR ALONE.

LOOKS AHEAD
WRITTEN BY STUART DREDGE

Merlin now represents the rights of
tens of thousands of independent
labels from 53 countries in licensing
deals with global companies
including Spotify, YouTube,
Deezer, Pandora and Facebook,
as well as regional streaming
services in countries including
Russia, China, India and Japan.
The not-for-profit agency was
created by the independent sector
for the independent sector, and
its market share can now be
comfortably compared to the
major labels, which positions
Merlin’s independent membership
front and centre on digital music
services alongside the majors.
Merlin also prides itself on
ensuring that all its members have
the opportunity to maximise the value
of the deals in which they participate,
with equal access to Merlin benefits
regardless of a member’s size.
After the anniversary celebrations,
CEO Charles Caldas’ thoughts have
turned to the next decade for Merlin
and its members, with the global
nature of its business looming large.
“We’re now truly operating in a much
more global marketplace than we ever
have before. All of a sudden we’ve
gone from a market where as an
independent label you were running
at best a regional business,” he says.
“In fact, most people were running
independent labels in their own town
and their own country, and getting
their music into other markets
needed people on the ground. It’s
fundamentally different now.”
In September, Caldas visited India for
the All About Music conference, and
his meetings with local independent
labels—“from Indian hip-hop to
electronic music and prog-rock
inspired instrumental music!”—has
made him realise how the streaming
era’s instant, global availability of
music is changing a market like India.
“It’s not one-way traffic. This
isn’t a ‘new colonialism’ where
western pop culture is colonising
the minds and ears of kids around
the world,” stresses Caldas, citing
the example of The Leaf Label
in the UK, which recently signed
an Indian artist from Mumbai.
WINTEL
“I don’t think that the history of
independent labels is littered with
examples of UK-based labels
using India as an A&R source!”
says Caldas, noting that another
independent label, Domino, has
“It’s not only the fact that the
put out music from Indian-folk-jazz
fusion band Yorkston/Thorne/Khan.
“It’s a by-product of technology: a
by-product of the fact that we now
have these streaming services
that are clearly resonating with
consumers, and are becoming
significant commercial players within
their respective markets,” he says.
“If you look at India with
streaming services like Gaana
and Saavn, you might think it’s
just about Bollywood music.
Charles Caldas CEO of Merlin
Yet I’m meeting young label heads
who grew up in Birmingham and have unexpected places now, and I think
moved back to Delhi, because they
think the hip-hop scene there is going out how you connect the availability
to create some incredible music.”
emergence of the instant availability
of music globally has created
a truly global audience. It’s
about what’s happening there
commercially in terms of how
independent labels are operating.”
Another example: Caldas notes
that an Australian label released
an album by a local folk-rock band,
saw a track get picked up by one of
Spotify’s playlist editors in Mexico,
and a few months on that country
was the band’s third biggest market,
complete with offers to tour there.
19
“Your audience can come from
this phase from here on in is working
of that music with the data that’s
readily coming out of those platforms,
which shows you what’s happening
to your music” says Caldas.
“It sparks questions about what the
shape of a label looks like; how you
harness those opportunities; how you
use data without being overwhelmed
by it. These all have their own
challenges, but overall it’s incredibly
exciting. We’re in a much more fluid,
dynamic global marketplace.”
It’s a noisy marketplace too:
around 20,000 new tracks get
added to a streaming service
like Spotify every day.
20
“IT’S WHAT INDEPENDENT LABELS HAVE
BEEN GREAT AT THROUGH THE HISTORY OF
RECORDED MUSIC: FINDING A GENRE, A
SCENE OR A PARTICULAR STRAIN OF MUSIC,
AND DEFINING IT BY MAKING SURE IT CAME
TO MARKET FOR PEOPLE TO DISCOVER.”
Cutting through that noise can seem
daunting for an independent label,
but Caldas thinks some traditional
principles will serve them well.
He looks back to the heyday of labels
like Chess, Blue Note and Motown—or
more recently 4AD, Ninja Tune and
Erased Tapes—when fans knew what
sounds and scenes labels represented
(and in many cases defined).
“You knew if you bought a Motown
record, you weren’t going to be getting artists is going to pay dividends.”
Perry Como or Dean Martin! It was a
brand, or a cultural touchpoint, that
defined a whole genre. And that’s what
labels like Ninja Tune and Erased
Tapes are doing now,” says Caldas.
“It’s what independent labels have
been great at through the history of
recorded music: finding a genre, a
scene or a particular strain of music,
and defining it by making sure it came
to market for people to discover.”
“In this playlist-driven world, you
see major labels chasing those
high-volume RapCaviar or Today’s
Top Hits tracks that really spike. But
independents haven’t really moved
from their strategies of building long- by streaming services comes from a
term careers for artists over several
releases, and allowing those artists
“The hits are always hits, and the
to develop in an environment where
they’re comfortable. I really do believe
we’re entering an era where that kind
of long-term commitment to your
One reason for that, Caldas believes,
is that the shape of the music market
is different from the days when
physical retailers would make 80%
of their money from a narrow range
of releases that were in the chart,
out that week or on special offer.
In the streaming era, there are
no ‘chart walls’ or ‘front racking’—
terms that younger artists and label
founders may not even understand—
and the 80% of revenue generated
much deeper repertoire of music.
streaming volumes for Drake and
other big artists are incredible. But
there’s a lot of activity happening
further down the food chain,
which is driving an enormous
amount of value,” says Caldas.
He also thinks that the nature
of streaming—particularly the
algorithmically-personalised playlists
such as Discover Weekly, Release
Radar and Daily Mix on Spotify, or My
New Music Mix, Chill Mix and Friends
Mix on Apple Music—is levelling the
playing field for independent artists.
WINTEL
“Your experience opening up that app
is now totally defined by whatever
you’ve been listening to in your history.
If you’re an electronic-music fan, you
won’t be seeing the new Katy Perry
record. It’s driving discovery deeper
down the food chain,” says Caldas.
“Consumers seem to be digging deeper
down into the crate, as it were, helped
by these playlists. And that is playing
into the favour of the independents:
it’s creating opportunities for them
that weren’t really available before.
And that’s creating more value. It’s
now easier to have a path to listeners
that totally bypasses the major-label
system than it’s ever been before.”
As he looks ahead to the next
decade of Merlin, Caldas does see
challenges as well as opportunities.
The fact that the music-streaming
market is dominated by large
technology companies, for example.
Universal Music Group has been
valued at between $22bn and
$40bn in recent times, depending
whose prediction you believe.
“IT’S NOW EASIER TO HAVE A PATH TO
LISTENERS THAT TOTALLY BYPASSES
THE MAJOR LABEL SYSTEM THAN IT’S
EVER BEEN BEFORE.”
CHARLES CALDAS
CEO OF MERLIN
That’s not so different from Spotify’s
market cap of more than $30bn,
but considerably smaller than
the current market caps of Apple
(more than $1tn), Google’s parent
company Alphabet ($818bn), Amazon
($943bn) and Facebook $478bn).
That’s a big change from the
days when the biggest record
companies were always bigger (in
value) than the biggest retailers
distributing their music.
“Now our key retailers are tech
companies that could in some
cases inhale the entire music
industry into their business
without burping!” says Caldas.
“On the positive side, it’s great
that those companies recognise
the value of music within their
offerings, and are making real
investment to create attractive
music propositions for consumers,
which in turn drive value to us.”
21
“But when the market starts to peak,
and they can’t just run on subscriber-
growth any more—when you’re
getting closer to a more mature
marketplace—that dynamic could
become challenging when you’re
a small industry in the hands of a
much bigger entity, and where those
massive tech companies are going to
start competing with each other for
consumers on price and content.”
Caldas thinks that the independent
music community should be thinking
about this now, even if such a scenario
is still several years away. He points
to what happened with physical-
music retailers in the past: when the
market matured, their relationships
with labels “became fairly attritional
around margin, and quite adversarial”.
Could the same happen with the big
technology companies in the music-
streaming space? Caldas hopes that
such a prospect can be fended off by
building healthy relationships with
them now, to keep them as “good
partners” in the longer term.
22
“They’re going to have the pressure
to start bundling different types of
repertoire into single subscriptions,
as we’re starting to see Amazon doing.
You’ll see music competing against
television and film and games in
multi-content subscriptions. So how
do you preserve value?” says Caldas.
“That’s the sort of question we need
to be thinking about, as well as what
does voice-activated music within
the car mean for consumption, and
for the access to market for the
independent sector? And how well
equipped are we to use all of the data
coming out of these services to our
advantage, and not be overwhelmed
or distracted or sidelined by it?”
INDEPENDENT
BUT NOT ALONE.
At the SoundExchange Companies,
we focus on innovation so the independent
music community can focus on music.
That’s one area where Merlin is
already at work, exploring the
potential to build technology for its
members to use, and ensure they
don’t fall behind what the major
labels can do with data to gain an
advantage in the market. The agency
is also positioned as a long-term
partner for independent labels, since
(unlike digital distributors, who are
currently hot acquisition targets for
major labels) it will never be sold.
He comes back to the inherent
innovation within the independent
community as a reason for optimism
about the future, however.
“In the long term, I hope that
the ambition and creativity and
entrepreneurship really wins
out. And independent labels are
particularly good at that,” he says.
“In the last 12 months, Merlin
has had our biggest influx of new
members since the year we started
operating, which I think is a strong
illustration of that desire from
labels to forge their own destiny.
If you’re a serious independent
that has ambition and enough
scale to be self-determining, it’s
easier than it has ever been to
play in that global marketplace.”
WINTEL
WINTEL 23
23

CASE STUDY:
CIGARETTES
AFTER SEX
WRITTEN BY STUART DREDGE

Greg Gonzalez Lead Singer

24

US BAND CIGARETTES AFTER SEX HAVE

BEEN AN INDEPENDENT SUCCESS STORY
OF RECENT YEARS, BUILDING A FERVENT
FANBASE ACROSS THE WORLD.

It started in 2015 when their “None of us really wanted to mess

tracks ‘Affection’ and ‘Nothing’s with that by using any overly clever
Gonna Hurt You Baby’—the former marketing techniques, but rather stick
uploaded by a fan and the latter to what’s worked and amplify with
on their own channel—caught an traditional media, a strong touring
algorithmic wave on YouTube which strategy, building the fanbase, feeding
developed into a long-term surge. them new music. It’s kind of old
school in that sense,” says White.
The band and their manager Ed
Harris (of Blue Raincoat) decided “It was really just always focused
to go with this flow, which saw fans on the music with a very minimal
feeling like they were discovering aesthetic, albeit in a very deliberate
Cigarettes After Sex’s music rather and considered way, and in that
than having it pushed at them. sense ‘discovery’ has continued
to be a really big driver in the
“We decided to let this happen: not
trajectory, with us really focusing
to force things, but to just support
our marketing plans on that and
what was already happening out
fans then feeling a lot of ownership
there, and then to bring out new
over the band which is important.”
songs. We didn’t sponsor posts and
in the early days we didn’t even do
ads on YouTube,” says Harris.
“We didn’t want to be coming in with
some sort of pitch or advertising—
something that was going to get in
the way of that experience. It wasn’t
just happening from word of mouth: it
was happening from the algorithms.”
For the first year, it was the band
and Harris making these calls,
before signing with label Partisan
Records – which was fully behind
the strategy of organic growth.
Zena White, from Partisan Records,
agrees that there was a strategy of
working with the algorithmic buzz.

Ed Harris Band Manager

WINTEL
From YouTube, the band put their
music on Spotify and other streaming
services, and saw all boats rise as
a result. They now have nearly 1.9
million monthly listeners on Spotify
and more than 423,000 subscribers
to their YouTube channel.
“It’s a very broad audience: it’s not just
one category of person or subculture.
And it’s all over the world: it happened
globally very quickly: just people
connecting to this music and this
aesthetic. It’s nice that something can
still take off in that way,” says Harris.
The international success of
Cigarettes After Sex hasn’t just
been about streaming: it’s also been
about touring, from a tour of 150-200
capacity venues in Europe in early
2016 that was driven by promoters
contacting Harris wanting to book
the band, based on the online buzz.
“Six months later it was 500-ticket
shows, and by the end of 2016
we’d done 1,000 people at one or
two shows,” he says. “And it all
happened very organically, with
promoters reaching out to us.”
Zena White Managing Director of Partisan Records
Touring also went against some
of the traditional expectations of
how a band can scale. European
promoters were keenest to book
the band in those early days, but
interest from Asia led to Cigarettes
After Sex touring there in 2017.
Interest has built to the point
where they are now playing a
5,000-capacity gig in Seoul, on only
their second visit to South Korea.
India is another country where
Cigarettes After Sex picked up a
following. In December 2017, the band
played the Bacardi NH7 Weekender
festival in Pune, after fielding plenty
of requests from fans there who’d
discovered their music on YouTube.
“The festival organisers couldn’t
believe how many fans came out
for the band, but if you look at our
YouTube stats, in user-generated
content India is number one. And
on Facebook, the biggest pie-wedge
after the United States is India:
of the 529,000 fans, more than
50,000 are from India. There’s a
huge fanbase there,” says Harris.
25
White praises the band’s willingness
to work hard on the road, and not
just in traditional markets like
London and Paris, but in cities like
Prague and Lisbon. She also links
the band’s willingness to get out on
stages across the world to some
of their success selling music.
“It was the physical numbers that
really surprised us on the rollout—we
always knew that France would be a
top market for us, everything about
it is what the French love so it’s no
wonder that Francois Hardy has been
a huge champion—but there is a
really high proportion of international
sales from secondary and tertiary
markets such as Poland and Thailand
where we’ve sold over 10k and 1k
units respectively,” she says.
“There are all these individual
stories of countries,” adds Harris.
“I really do think Cigarettes is just an
amazing test-case for what happens
when a band breaks on the internet
worldwide. Although not everyone
trusts it: one label we talked to said
their digital analytics team thought
our numbers were fake, because
so many were from India. I said if
that were the case, we wouldn’t be
selling shows out all over the world!”
26
IT’S IMPORTANT TO STRESS THAT
THE SUCCESS OF CIGARETTES AFTER
SEX IS NOT ABOUT ‘VIRALITY’— IT’S
ABOUT THE MUSIC ITSELF.
It’s important to stress that the
success of Cigarettes After Sex
is not about ‘virality’—it’s about
the music itself. “It’s the type of
beautiful music that cultivates both
an obsessive fan base and a huge
amount of passive listeners, so it’s
the perfect storm really,” says White.
“We had theories about the name
initially being clickbait, but honestly
the engagement in the actual music
is too high for that to be the case.
There are a lot of repeat listens
and we’ve been running analysis
on search terms to find that hardly
anyone searching ‘cigarettes’ or
‘sex’ stays on a play for longer than
a few seconds. 43% of 1.9million
monthly Spotify listeners are
from user library saves and the
highest YouTube driver is search.”
Harris sees the band’s growth as proof
that remaining independent is a viable
road to a global fanbase, contrary to
some traditional assumptions that this
would require the kind of marketing
clout only a major label could provide.
“Some of this is untried territory: Playlists on streaming services have
there isn’t a model for this! In a also played a role, with Cigarettes
lot of ways, there isn’t a model for After Sex’s music suiting some of
anybody any more: once there’s the most popular mood-focused
an initial spark and you’re up and playlists, as well as making its way
running, it’s up to you to build it,” onto the big new-music playlists on
he says. “And yes, you can have an services like Spotify and Apple Music.
amazing, international success in the
White, however, says that this
indie sphere, and not need to move
is not a ‘playlist-driven’ success
to a major. Of course, you can decide
story. “I can tell you that of their 1.9
to make that move if you think it’s
million Spotify monthly listeners,
right for the artist, but a band like
43% of plays are coming from own
Cigarettes show it’s not a necessity.”
playlists and libraries, 20% from
This even extends to some the band’s profile and only 14%
traditional areas like radio. from Spotify’s editorial,” she says.
Cigarettes After Sex might not seem
“I’ve seen other examples where
like a stereotypical ‘radio-friendly’
a band has a lot of plays but it’s
band, but Harris says he has been
mostly Spotify editorial. Which
surprised at how stations around
means it’s mostly passive listening
the world have backed the band.
from the platform’s own playlists
“I’ve been surprised at how well we’ve and algorithms—which means it’s
done at radio, from the BBC stations in a struggle to build an audience.”
the UK to KROQ in the US. But having
Much of the band’s success has
the groundswell of the algorithms
been organic, but that doesn’t
and fan support was definitely a
mean there hasn’t been a lot of
powerful way. Satellite radio didn’t
thought behind the process from
pick up on the song until the record
both label and management.
had been out a year, but once they
picked it up, it became a bona fide
hit. And a lot of the US commercial
stations look at that now, so we had
people reaching out to us about
pushing ‘Apocalypse’ to commercial
radio. That wasn’t even in my mind
to try to go after for this band!”
WINTEL
ACROSS LAST YEAR (OCT 2017—OCT 2018) INDIA HAS BEEN
SECOND SOURCE OF VIEWS FOR OFFICIAL MUSIC VIDEOS IN THE CHANNEL
PARTISAN RECORDS’ DATA
SHOWS HOW CIGARETTES AFTER
SEX HAVE BEEN REACHING FANS
ON YOUTUBE IN INDIA, POLAND,
MEXICO AND TURKEY AMONG THE
USUAL MAJOR MUSIC MARKETS.
“We’ve spent more time analysing
and hypothesising on this campaign
than we have spent on some of
our most active campaign setups!
That’s really the key... you end up
having to sit on your hands and think
intelligently about what is working
rather than rolling out the same
spending budgets which is actually
really fun and makes for some
fantastic conversations,” says White.
“We have a great relationship with
Ed and Blue Raincoat which really
feels like we’re all invested, and
they are cool to try new stuff, but
none of us want to spend on things
that don’t have any impact.”
27
Data supplied in October 2018.
Harris stresses that for all the viral “That doesn’t mean that we don’t still
fame that came Cigarettes After Sex’s need or want those traditional media
way, it’s the quality of the band’s formats to come on board—of course
music (and their performance of it live) we’re focused on that too—but they’re
that matters in the long run. “It always not the gatekeepers anymore.”
comes back to live. It’s amazing what
YouTube and playlists and the internet
has done for the band, but once
that’s all up and running, live is the
best way to connect with your fans.”
White says that the relationship
with fans has also been key. “Across
our roster, not just with Cigs but
also with IDLES, we’re learning
that it’s just as important to nurture
and embrace communities of fans
than it is to go after the traditional
methods of getting a ‘hit’. Social
media has replaced traditional
editorial in that way,” she says.
28
a l l y.com
usi c
.m
www

is delighted to be able to offer our subscription information service

to all independent label employees worldwide free of charge courtesy of
sponsorship from FUGA and Spotify and support from WIN

In association
with

#MarketMusicBetter
To keep up with the latest developments in the music business and learn
more about digital marketing just sign up below:

https://MusicAlly.lnk.to/IndieLabelSignup

Music Ally is also offering WIN member labels a special introductory rate of
£299/$399/€349 for one of our artist digital health checks where we take
a deep dive into:
• SEO
• Website Analysis
• Audit of Social Profiles
• CRM and email marketing
• Data Collection
• Data Ownership
• YouTube
• Spotify and streaming services

To take advantage of this offer please contact anthony@musically.com

WINTEL
TALKING TO POWER:
SEPTEMBER 2018 WILL GO DOWN IN
HISTORY AS AN EXTREMELY POSITIVE
MONTH FOR THE MUSIC INDUSTRY,
WHY THE INDEPENDENT
THANKS TO THE PROGRESS MADE ON
NEW LEGISLATION ON BOTH SIDES OF
THE ATLANTIC OCEAN.
VOICE MATTERS
In the US, the Music Modernization
Act (MMA) was passed unanimously
by the Senate, in a process under
which a single objection from a
senator could have seen the bill
delayed—and possibly even falling by
the legislative wayside altogether.
The MMA is the biggest revamp of
US copyright laws for decades, and
includes changes that will simplify
the licensing process for music-
streaming services; ensure artists
and songwriters receive royalties
for streams of songs recorded
before 1972; and introduce a ‘willing
buyer / willing seller’ structure
for satellite-radio licensing.
In Europe, meanwhile, the European
Parliament approved its take on a
new copyright directive, including
politicians voting to approve the much-
discussed Article 13 of the proposed
legislation, which would make
“online platforms and aggregators
liable for copyright infringements”.
29
WRITTEN BY STUART DREDGE
The music industry had campaigned
in support of Article 13, seeing it as
a way to fix the problem of the ‘value
gap’ between the amount of music
being consumed on platforms like
YouTube, and the royalties which they
pay out to music rightsholders.
Two pieces of legislation, and two
success stories for the music industry,
although both the MMA and the
European Copyright Directive have
more steps to go before they become
law. But September’s progress
also illustrated something else:
the importance of the independent
community’s voice in the lobbying
that led up to the crucial votes.
From A2IM in the US to IMPALA and
independent-label bodies across
Europe, the independent voice is being
heard loud and clear in Washington
DC, Brussels, Strasbourg and
anywhere else where politicians and
policymakers are at work. Our sector’s
credibility with these decision-makers
is at its highest level ever, and it is
driving real change that benefits our
global community of labels and artists.
30
“THEY ALL HAD AN INFLUX OF
DOLLARS THAT THEY DIDN’T
HAVE BEFORE. THEY WERE ABLE
TO LEVERAGE THAT INTO THEIR
BUSINESS AND INTO ARTIST
DISCOVERY AND DEVELOPMENT.”
STUART JOHNSTON
PRESIDENT OF CIMA
CANADIAN BEGINNINGS
Tracing this political clout back takes
you to the early 1970s in Canada,
where an informal association of
independent music companies
came together for what would
later be formalised as trade body
CIRPA—which has since evolved
into the Canadian Independent
Music Association (CIMA).
In the 1980s and 1990s, it successfully
lobbied on the issue of quotas for
the amount of Canadian music that
was played on the radio, with those
quotas starting at 20%, then rising
to 25% and ultimately 35%— and
50% on public broadcaster CBC.
Stuart Johnson President of CIMA
“Parallel to that, we were successful
in getting the government to mandate
that radio channelled a proportion
of its revenues back into the music
industry. That got some great
airplay and visibility of our artists
on Canadian radio, coast-to-coast,
and it also provided the royalties
for that airplay to our artists, so it
created a stronger revenue stream
for those artists on the radio,” says
Stuart Johnston, president of CIMA.
“Just as importantly, because the
radio stations were mandated to also
channel a proportion of their revenues
back into the industry, it actually
strengthened the infrastructure that
we have in Canada, and it allowed
our industry to have the resources
that they were then able to leverage
to invest in more and more artists.”
WINTEL
“That raised the bar for our industry
and it created a very strong foundation
and infrastructure of companies
like record labels, managers,
publishers and studios [in Canada].
They all had an influx of dollars that
they didn’t have before. They were able
to leverage that into their business and
into artist discovery and development.”
CIMA also secured some important
concessions the last time Canada’s
Copyright Act was reviewed, six years
“The biggest thing was being able
ago, and continues to be a prominent,
credible voice in music-related
public debates in its homeland.
31
COOPERATION AND LEGISLATION “The voice of the independents is
different to the voice of the rest of
Fast forward to 2018, and you’ll the community, and it adds huge
find a similar sense among the value. But clearly, working together
bodies representing independents is very important,” agrees Helen
that their advocacy can benefit the Smith, executive chair of IMPALA.
entire industry. That’s why both
“In Europe we have various coalitions
A2IM and IMPALA worked closely
on the value gap, competition, the
with bodies representing major
relationship with platforms… We have
labels, publishers, songwriters and
a fluid approach: the composition of
others in the run-up to September’s
our coalition will change according
crucial MMA and Article 13 votes.
to the issue that we’re working on.”
Smith adds that particularly when
to pull together with the rest of
an issue sees the music and tech
the industry. There are things we
industries on opposite sides of
don’t always agree on, but you
the debate, as it did with Article
can’t get anything done in America
13, the role of independents
unless you act as a single music-
is even more important.
industry unit. So we’ve been pretty
successful in doing that over the
past couple of years,” says A2IM
CEO Richard James Burgess.
“THE VOICE OF THE INDEPENDENTS
IS DIFFERENT TO THE VOICE OF
THE REST OF THE COMMUNITY,
AND IT ADDS HUGE VALUE.”
HELEN SMITH
EXECUTIVE CHAIR OF IMPALA
32
Helen Smith Executive Chair of IMPALA
“It can sometimes be convenient for
opponents to try to portray a debate
as polarised around ‘big tech versus
big music’. That alienates all the
other actors who are concerned,
and detracts from the validity
of their points,” says Smith.
“For us, it was important to ensure
decision-makers understood that
Article 13 is important for everyone
involved in the creative chain: whether
you’re big or you’re small, not yet
known or already established.”
Both the MMA and Article 13
are examples of legislation
affecting the entire music industry
which could, nevertheless, have
a particularly big impact on
independent labels and artists.
“Without this legislation, the chances
of individual musicians or labels being
able to negotiate and have a say in
how their music is used online are
minimal, compared to the chances
you would have as a big operator,”
says Smith, of the European plans.
“This was our chance to communicate
to those who were voting that this
was their opportunity to level the
playing field for everyone. Platforms
would not just be paying those
who are big enough and organised
enough to negotiate agreements,
but also those who are smaller.”
BUILDING CREDIBILITY
How did we get to this point? In
Canada, the US and Europe alike,
the first steps were educational:
explaining to policymakers what
the independent community is; how
and why it differs from the major
music companies; and why its voice
deserves to be heard separately,
as well as alongside them.
In Canada, where the independent
market share has grown from 20%
to around 25% over the last eight
years, Johnston sees progress.
“It took a lot of education, but
they finally know the distinction
between indies and majors.
At the same time, it is still a constant
education process in government—be
that at the provincial level or the
federal level—to re-educate them
about who we are and what we
do,” he admits. “Bit by bit, we are
chipping away. They [the government]
are certainly more educated today
than they were five years ago.”
Smith underlines the key role that
national associations play in getting
messages across in Europe, building
relationships and influencing local
decision makers. “Through this
network our campaigns become
more than the sum of their parts.”
WINTEL 33

“OFTEN WHEN A DIGITAL

Burgess points out that this
kind of education process isn’t
just for governments: it’s just as

SERVICE STARTS UP, THEY

necessary for new companies
entering the digital music world,
from tech giants like Amazon and

HAVE ALMOST NOBODY

Facebook to smaller startups.
“Often when a digital service starts up,

THERE WHO KNOWS

they have almost nobody there who
knows much about music. Some of
them still don’t! They’re tech people,

MUCH ABOUT MUSIC.”

y’know,” says Burgess. “So they look
at the landscape, and [major-label]
people say ‘we represent 85% of all
recorded music’. They distribute 85%
of all music, in America. But they don’t
own 85%—they own about 62%, and RICHARD JAMES BURGESS PHD
we own about 37.32% according to the CEO OF A2IM
last numbers that Billboard published.”
“If independents choose to deliver
their music through the major labels,
it doesn’t give the majors ownership
over that. Saying the majors own 85%
of the music market is like saying
FedEx, the US Postal Service and
UPS own 100% of online retailing!
They deliver 100% of online-retail
goods. But they don’t own it.”
Burgess’ point is that it’s the role
of local bodies like A2IM as well as
WIN on the global level to correct any
misapprehensions among new digital
services, as well as policymakers.
“We have been really active in
expressing the numbers, so that
the digital services are aware they
don’t just have to deal with the three
majors and deliver us crumbs: giving
them 85% of the money while leaving
37% of the market to live on the
other 15% of the money,” he says.

Richard James Burgess PhD CEO of A2IM

34
ACCESS TO FINANCE
Building the political credibility
of the independent community
has been about more than its
market-share within the music
industry. It’s about explaining its
importance to the wider economy.
“The independents are small and
medium-sized companies. And
there’s certainly a sense in Congress
here that small and medium-sized
businesses, as they say, are the
engine of the economy,” says Burgess.
“Job creation comes from small
and medium-sized businesses,
more than large businesses.
They really do add up.”
It’s the same in Europe, with Smith
saying that an important aspect
of IMPALA’s work in recent years
has been working on issues like
access to finance, which led to a
new EU initiative called the ‘Cultural
and Creative Sector Guarantee
Facility’—which encourages banks
to lend to small and medium-sized
companies in the cultural and
creative industries, music included.
“WHAT WE GOT WAS A
CONSERVATIVE GOVERNMENT TO
MAKE THAT FUND PERMANENT.
THAT WAS A HUGE SUCCESS”
RICHARD JAMES BURGESS PHD 
CEO
“There’s a huge multiplier effect
when you have a guarantee behind
you. Banks are more comfortable
and they will lend more. You can
use finance to grow, and that’s
what’s important to the independent
[music] sector,” says Smith.
“We need to have more medium-
sized companies to strengthen the
sector for the longer term. We need
to grow the missing middle! And
that’s something the EU has been
looking at for a long time across
multiple sectors: we don’t have
enough medium-sized companies.”
In Canada, too, access to finance
has been a rallying point for the
independent community. Johnston
says that under the last government,
there was a threat that the Canada
Music Fund—a $26m annual fund
that goes into the music industry—
would be scrapped. But CIMA’s
campaign to avoid that paid off.
“What we got was a Conservative
government to make that fund
permanent. That was a huge
success,” he says, adding that CIMA
also convinced the new government
to commit to a new, annual export
fund for the creative industries,
worth $25m a year over five years.
Exports are a key strategic goal
for CIMA. A decade ago, it ran
three export missions a year for
its members to The Great Escape
in the UK, SXSW in the US and
MIDEM in France. Now it runs more
than 20 missions a year under the
brand of Music Export Canada.
Access to finance is a key advocacy
point in the US too. “I see it when a
label gets started, has some success,
and then gets snapped up by a major
label. We want to extend the ability
to our labels and even independent
artists who are self-releasing
to be able to stay independent if
they choose,” says Burgess.
“They might still sell to a major
label, if they’re doing it for the right
reasons and getting a fair deal out
of it. But I hate to see people selling
a label they’ve worked on for 30 or
40 years, just because there aren’t
good alternative options available.”
WINTEL
“THOSE WHO WANT TO
CONSOLIDATE HAVE TO JUSTIFY
WHY IT IS ACCEPTABLE. IT’S NOT
FOR THOSE WHO OBJECT TO SET
OUT WHY IT SHOULD BE STOPPED”
HELEN SMITH
EXECUTIVE CHAIR OF IMPALA
TACKLING CONSOLIDATION
IMPALA works across a range of
issues, but it’s the organisation’s
role in speaking out against
consolidation of the major companies
in our industry that has clearly
highlighted its impact, down the
years: from its opposition to Time
Warner and EMI’s planned merger—
which was abandoned in 2001.
“This was the first time that the people
who had to make decisions could
actually hear from the independents
about what they thought the
impact would be. That was totally
transformative,” says Smith.
“Never before had anyone been to
the Commission to say hold on,
have you thought about what this
might do for competition? Have you
thought about the impact this might
have on the charts, or on whether
or not you can get on the radio?
These are points that IMPALA was
able to make that had never been
heard before, and that completely
changed how the EU looked at
consolidation in our market.”
2004 saw IMPALA file a class-action
in relation to Sony and BMG’s plans
to merge, after the Commission
had raised serious concerns, then
cleared the merger. The lawsuit
was an important factor in the 2006
decision by a European court ruling
against that clearance, although on
appeal, that decision was reversed
again in 2007. Ultimately Sony
ended up buying out BMG and the
litigation was set aside before a
final decision could be reached.
Even so, IMPALA’s case had longer-
term consequences. “The court found
no presumption in favour of mergers.
Those who want to consolidate have
to justify why it is acceptable. It’s not
for those who object to set out why
it should be stopped,” says Smith.
35
“That seems obvious now! But in
actual fact, that was a big decision in
the court: it was the first time they’d
ever said that. One EU law firm said
that merger control procedure owed
a debt of gratitude to IMPALA.”
FIGHTING FOR FAIRNESS
One topic that comes up regularly in
the interviews around independents’
political clout is the idea of fairness,
and a moral authority that carries
weight with policymakers.
“There is a moral authority: we are
seen as ethical,” says Burgess, citing
the Fair Digital Deals Declaration,
which was launched by WIN in July
2014 as a commitment by independent
labels to treat their artists fairly in
agreements based on the exploitation
of their work on digital services—for
example, when advances are paid
for a catalogue, or when there’s a
windfall from equity in a company (for
example Spotify) that goes public.
36
“The perfect example of that is
that Merlin had a plan in place to
pay out the Spotify equity way ahead
of the listing, and they paid out the
equity within a couple of days of the
listing. And then Sony Music
followed suit,” says Burgess.
“Merlin set an excellent precedent.”
Here, too, there is collaboration with
other companies within the industry.
Three years ago, when new rates
were being set for ‘non-interactive’
music-streaming services in the US,
like Pandora, A2IM pushed back at
a suggestion that in terms of royalty
payments, independent tracks might
be worth less than major-label tracks. resistance to doing it,” he says.
“That was very upsetting to our
sector! But we started having
regular meetings with the RIAA and
the major labels, and were able to
establish between us that we would
not view things that way. The majors
said, to their credit, a copyright’s a in an era when the music industry
copyright: an independent label’s
copyright is worth as much as a
major label’s copyright,” he says.
“That’s the benefit of having a trade
association like A2IM, and it shows
the enormous importance of having
collegial relations within the business.
We don’t always see eye to eye with
the majors, but we need to be able
to sit down and work together… Look
at the MMA. The music industry’s
had a drought for decades getting
nothing through. Suddenly, when
we all stand together, we do.”
“NOW, I THINK PEOPLE ARE PRETTY
CLEAR, THAT THE INDEPENDENT SECTOR
IS A FORCE TO BE RECKONED WITH!”
RICHARD JAMES BURGESS
CEO
COLLECTIVE ACTION
Given the success stories from
independent lobbying over the last
several decades, the benefits for this issues that I can’t address on my own.
sector of a unified voice may seem
obvious. However, there was some
convincing to be done in the early
days of all these organisations.
Burgess refers to fierce independence
as a wider American quality, including
for small and medium businesses
– music included. “It’s built in to
the constitution of the country!
And so I think that when A2IM was
formed, there was quite some
“The idea of collective action versus
the American capitalist sensibility of
‘we can do this and build ourselves
up and have all the clout we need’.
But it has become obvious to even
the biggest independent labels that,
does not control its own distribution, the independent sector understands
there are issues that are bigger than
even the biggest independents.”
“Sure, I can survive as an independent
label, and even become very wealthy
as a label owner if I do well. At the
same time, there are certain big
You can negotiate the best deal in the
world, but if there’s legislation—or
a lack of legislation—in place that
causes you to make 20% less across
the board, if you negotiated 5% better
than your competitor, you’re still
15% worse off than you should be!”
Helen Smith agrees, and says that a
similar evolution in attitudes happened
among European independent
music companies, at different paces
according to the country, with some
organisations in existence for 40 years
and others starting more recently.
“We can see now that the independents
across Europe believe that there is a
value in collective action, on a number
of different levels: commercial,
political, financial… we can see that
and feels there is a direct tangible
benefit in that,” says Smith.
“They understand that collective
action doesn’t mean that you are
losing your identity. Obviously, all
the independents are competing
fiercely with each other, but at
the same time they can benefit
from collective intelligence.
WINTEL
Photography credit: Christian Wiediger
FACING THE FUTURE
With this unity secured, there are
more battles to be fought by all
these organisations. IMPALA is
busy on Sony’s attempt to gain sole
control over EMI Music Publishing
and is also working on a new
EU regulation that is intended to
deliver fairness for businesses
dealing with online services.
In the US, A2IM is training its sights
on the long-standing complaint over
terrestrial radio’s lack of royalties
paid out for music recordings played
on the airwaves, while in Canada,
CIMA is ensuring the government
delivers on its promise of a new
review of the Copyright Act, and
mulling whether its radio-quota
lobbying successes of the past could
be revived for the streaming era.
“Clearly the most important part of
streaming for artists is the playlists
on those platforms. We are wrestling
with that,” says Johnston. “While
streaming services are global, if you
are operating in any territory, I think
its strength should echo that of radio.
Reflect the local scene—because that
is where people live and breathe.”
Underpinning all of these initiatives
and campaigns is a strong awareness
that the independent community is
strong, credible and respected in
the corridors of power. A message it
does no harm to continue reminding
those corridors’ inhabitants of.
“It’s important to be very open about
our strengths. We adapt and we keep
moving—and that’s one of the reasons
why we are successful.” says Smith.
37
“We are also very high risk-takers.
In Europe, we account for 80% of
all new releases, and that gives you
a certain clout when you negotiate,
and when you speak on behalf of the
sector—because the sector is very,
very creative. We are faster, better,
smarter and we are leaders of the
music sector today. And that’s a very
powerful, and a very compelling story.”
Burgess agrees: “Now, I think people
are pretty clear, that the independent
sector is a force to be reckoned with!”
38

THE FUTURE
WITH 180 MILLION MONTHLY ACTIVE
USERS, INCLUDING 83 MILLION PAYING
SUBSCRIBERS, SPOTIFY’S REACH IS

IS BRIGHT FOR
COLOSSAL; BUT ITS COMMITMENT TO
INDEPENDENT LABELS AND ARTISTS HAS
REMAINED CORE TO ITS BELIEFS.

INDIES ON SPOTIFY
WRITTEN BY JEN MASSET SPOTIFY

I joined Spotify in 2017 because I share PLAYLIST SUBMISSION GIVES

these same beliefs. I’ve spent over 25
years working with the independent
music community, from record
stores to labels to the A2IM trade
organization. So naturally, I’ve been
impressed with how Spotify has fully
and fairly embraced the indie world.
All artists and all labels are incredibly
important– Spotify wouldn’t be a
global platform without a variety of
sizes and types of content owners. But
there are specific needs and desires
unique to indies, and now that I’ve
joined Spotify myself, I work with an
incredible team that’s dedicated to
supporting them. As Spotify’s Head
of Independent Label Support, part
of my job is to ensure that indies
are best utilizing the platform’s
many helpful tools and features.
Here are a few of my favourites.
EVERY ARTIST A SHOT
Playlist Submission allows artists
and labels to submit unreleased
music directly to our editorial team
to be considered for a playlist. It’s a
simplified and systemised way for
them to, in one click, reach our global
team of curators algorithmically.
This brings everyone to the table in
a way that wasn’t possible before.
It also helps us find music in all
the niches and sub-genres and
stay up to speed on global trends
we may not have had visibility into
otherwise. For example, a genre
like Digital Maskandi… how would
I have otherwise discovered that?

Jen Masset Global Head of Independent

Label Support at Spotify
WINTEL
WITH SPOTIFY CODES, MUSIC IS
JUST A SNAPSHOT AWAY
Spotify Codes offers a new and
easy way to share Spotify content
with your fans. It works like a QR
code: You just enter the link from
a playlist, song, or anything else at
SpotifyCodes.com, and place the
resulting image onto any marketing
materials. Fans can then scan it and
immediately access it in Spotify.
39
SPOTIFY FOR ARTISTS & SPOTIFY NOW IN BETA: UPLOAD YOUR MUSIC
ANALYTICS OFFER ULTIMATE TO SPOTIFY
CONTROL One of the top-requested features
Spotify for Artists and Spotify Analytics from artists has been the ability to
are hugely important. They make it upload music directly onto Spotify.
so that artists and their teams can Spotify for Artists recently unveiled
maintain control of their music. It’s a feature that does just this, and is
really simple to see song stats and now being beta tested by a number
data, which helps artists get a sense of of US-based DIY independent artists.
their audience. They can also submit The feature will roll out to more artists
songs for playlist consideration, in the near future, enabling them to
control their profile to better engage deliver their music straight to Spotify,
with fans, promote their work, and plan for the perfect release day, and
really get the most out of Spotify. enjoy full control over their metadata.
40
“WHEN ARTISTS PLAYLIST SUBMISSION GIVES
EVERY ARTIST A SHOT
AND LABELS In the overall ecosystem of the music
industry, streaming plays an extremely but when someone hears that artist,
important role. But it’s not the be-all they want to know more about them,
EMBRACE and end-all. You can’t just make your
music available on streaming services story is. There should be strong
and then go to a deserted island and
STREAMING IN retire. You should be out there touring, conveyed quickly and easily. That’s
you should be out there releasing
merch, you should be out there on
THE RIGHT WAYS, socials, engaging with your fanbase.
When artists and labels embrace
EXPOSURE
streaming in the right ways, exposure
can increase exponentially. It helps
you sell more tickets and more vinyl,
CAN INCREASE
and it’s going to help you engage with
more fans on social media, because
people have better opportunities to
EXPONENTIALLY.”
discover your music and to enjoy it.
HOW FANS CAN DISCOVER WEEKLY:
DISCOVER YOUR MUSIC A weekly round-up of songs that
On top of creating tools and Spotify thinks fans will love based
resources to help artists and labels on their listening history and that
thrive, we’ve also created endless of other Spotify fans with similar
ways for your fans (and future fans) tastes. It refreshes every Monday
to discover more of your music. and gets even better the more
Here are a few of my favourites: you use the platform. It’s helped
me find some amazing songs
and artists I probably wouldn’t
have discovered on my own.
DAILY MIXES:
The perfect line-up of tracks, based
on the different styles of music
the user regularly listens to, ready
to play at the touch of a button.
Every user can have up to six, and
I’m obsessed with all of mine.
The labels and artists that I’ve seen
really thrive are the ones who’ve
invested in artist development. We,
as a platform, can enable discovery,
what they stand for, what their
branding, visuals, and personality
how you really succeed, and Spotify
provides artists and their teams with
tools to help make that happen.
Spotify will always be an ally for
independent artists and labels.
We make it easy for them to tell their
stories in their own voices—and
to do that on a scalable level. Our
flexibility and options allow them to
get out there and find their fans. We
have been and will continue to be
their partner on the road to success.
NEW MUSIC FRIDAY:
A flagship playlist that updates
weekly on Fridays with the hottest
new songs across many artists
and genres. I love discovering the
latest and greatest each week.
RELEASE RADAR
Like New Music Friday, but
personalized. It’s my favourite
feature. I’m always adding tracks
from it into my own personal
playlists. I always recommend
that artists encourage their fans
to click the “Follow” button on
their artist page. That guarantees
that their new music on Spotify
is automatically added to their
followers’ Release Radar playlists.
WINTEL 41

SPOTIFY CASE
ESTABLISHED: 1996
HEAD OFFICE: HAMBURG, GERMANY

STUDY: KONTOR
FOUNDERS: JEN THELE
CURRENT ROSTER: ATB, SCOOTER,
LOUD LUXURY, EL PROFESSOR,

RECORDS
LOST FREQUENCIES

WRITTEN BY JEN MASSET SPOTIFY

42

“KONTOR When I think of an indie label that’s

truly embraced all that Spotify has to
offer, I immediately think of Kontor
AS A LABEL, YOU’VE TAKEN FULL
ADVANTAGE OF ALL THAT SPOTIFY

IS HEAVILY Records. Founded in Germany in

1996, Kontor grew from Hamburg’s
illustrious dance scene as an offshoot
HAS TO OFFER. CAN YOU TELL
ME MORE ABOUT ITS IMPACT?

UTILIZING of the popular nightclub of the same Streaming has developed into
name. With their own “Kontor Top of a hugely important part of our
the Clubs” playlist boasting over 400 business, so we invest considerable

SPOTIFY’S thousand followers, Kontor is heavily time and energy in getting this
utilizing Spotify’s tools to expand their right. We are always eager to learn
reach and gain popularity across the more and try out new strategies.

TOOLS TO globe—to the benefit of their artists.

I asked Kontor about their favourite
Spotify tools and how the platform
Starley’s debut single, “Call On
Me,” came from our Australian label

EXPAND
partner. Spotify played a crucial role
has impacted the label’s growth so
in making it a hit through platform—
far. Here’s what they had to say.
wide support for the Ryan Riback

THEIR REACH
remix. We did a lot of the groundwork
on radio–and video, of course–but
Spotify certainly helped in a new way.

AND GAIN
POPULARITY
ACROSS THE
FANS FIRST
GLOBE” Fans First is Spotify’s global
reward program that celebrates all
the devoted super-fans (and there
are a lot) across the platform. It
provides dedicated listeners with
exclusive offers and invites–like a
pre-sale and exclusive concert with
Foxing or a limited edition vinyl
from Father John Misty himself–
while supporting additional
revenue streams for artists.
For artists of all sizes, Fans First
offers an amazing opportunity
to connect with loyal listeners
and give them an opportunity
to invest in their favourite
artists. It’s a win-win.
WINTEL
“KONTOR HAS ALWAYS BEEN READY AND
WILLING TO EMBRACE NEW CHANNELS
AND SERVICES TO PROMOTE AND
RELEASE MUSIC. THIS HAS HELPED TO
INCREASE BRAND AWARENESS AS
WELL AS SECURE MAXIMUM IMPACT
FOR OUR MUSIC PROJECTS.”
WHICH OF SPOTIFY’S
DISCOVERY TOOLS HAVE YOU
UTILIZED THE MOST?
Features such as New Music
Friday (or NMF Cratediggers
in the case of electronic music
specifically) can give projects a
real boost in the week of release.
We also focus on new playlists
across the full spectrum of dance
and electronic music, so we try to be
completely up to date with all relevant
playlist features and identify where
each new play or playlist comes from.
WHAT ARE SOME OF THE LABEL’S
GOALS FOR THE FUTURE?
Continuing to release high quality
dance and electronic music and
hopefully have more hits! Kontor
has always been ready and willing to
embrace new channels and services to
promote and release music. This has
helped to increase brand awareness
as well as secure maximum impact
for our music projects. The two things
go together. Staying independent is
also important–this enables us to act
quickly and flexibly. Timing is key, so
we like to be in control of every step
in terms of getting our music heard.
43
WHAT ROLE DO YOU THINK SPOTIFY
WILL PLAY IN THE SUCCESS OF
INDIES GOING FORWARD?
Spotify is already essential for
independent labels and distributors.
With regard to our home territory of
Germany, the physical and download
markets have been quite resilient but,
of course, on a global scale streaming
is leading the way. There will always
be room for other formats (we even
released a SCOOTER cassette last
year) but it is absolutely essential
to be part of the conversation on
Spotify, as it’s the shortest route to
connecting with fans of our music.
44

WHAT AN
KEY STATISTICS PROVIDED BY
WINTEL RESEARCH SHOW

INDEPENDENT
WHAT AN INDEPENDENT
LABEL LOOKS LIKE IN 2017.

LABEL LOOKED
LIKE IN 2017
AMOUNT OF PART-TIME STAFF AMOUNT OF FULL TIME STAFF

3.2 13.6
PART TIME STAFF FULL TIME STAFF
AVERAGE NUMBER OF DEPARTMENTS

2.7
DEPARTMENTS
WINTEL 45

ARTIST LOYALTY STAFF LOYALTY

77%
OF ARTISTS
CHOOSE TO
RENEW THEIR
CONTRACTS WITH
INDEPENDENT
LABELS 42%
OF STAFF HAVE
BEEN THERE SINCE DAY 1
AVERAGE NUMBER OF ARTISTS HOW LONG THE AVERAGE LABEL HAS BEEN IN OPERATION

14.9
YEARS
OVERSEAS INDEPENDENT REVENUES

31%
OF INDEPENDENT
REVENUES COMES
FROM OVERSEAS
46

BREAKING BORDERS:
THIS YEAR’S WINTEL SURVEY SHOWED
STRONGLY THAT INDEPENDENT LABELS
ARE INTERNATIONALISING THEIR

INDIE INTERNATIONAL
BUSINESSES, AIDED BY THE GLOBAL
REACH OF STREAMING SERVICES AND
SOCIAL NETWORKS, AS WELL AS BY THE
HARD WORK OF THEIR ARTISTS AND

SUCCESS
STAFF IN BUILDING FANBASES BEYOND
THEIR HOME COUNTRIES.

WRITTEN BY STUART DREDGE

This year’s WINTEL survey showed
strongly that independent labels are
internationalising their businesses,
aided by the global reach of streaming
services and social networks, as
well as by the hard work of their
artists and staff in building fanbases
beyond their home countries.
With the average independent now
getting 31% of their revenues from
overseas – and a number getting
well over that percentage - WIN
talked to some indies who’ve
been finding success abroad.
German classical label Berliner
Philharmoniker Recordings was
founded in 2014 to release recordings
by the storied orchestra, which
already ran its own online-video
service, the Digital Concert Hall.
“Currently, we broadcast about
50 live concerts per season and
have more than 500 concerts in the
archive,” says label manager Felix
Feustel. The orchestra has also
worked hard on growing its social
media following, which currently
stands at 1.2 million people.
The label now distributes via an online
shop and to key retailers, while also
using distributors for markets like
South Korea, Japan and the US.
“In a way, video streaming was and
is the foundation of our success,
but audio streaming is only an
add-on. The irony is that we have
more than 1.5 million monthly
listeners on Spotify, but right now,
if we exploited that potential, we
would only play into the hands of the
major labels who own the bulk of
our past catalogue,” says Feustel.
However, the label has been
focusing on going beyond standard
recordings: for example, by releasing
performances as Blu-ray discs
with multiple bonus videos, as well
as making recordings available in
high-resolution audio formats and
beautifully-designed vinyl editions.
“Our elaborate ‘coffee table’ CD
editions sell for 39 to 79 Euros and
we sell more than 5,000 units of each
release. Our Beethoven symphony
cycle (69 Euros) sold more than
15,000 copies and counting – and
the orchestra owns the full rights
for the future,” says Feustel.
“We are aware that the future
belongs to streaming, but we do not
generate relevant income from it. A
new orchestra recording can simply
not be financed with streaming. So
we are exploring and discussing the
issue actively, but it is very difficult
to define a strategy,” he says.
WINTEL
Felix Feustel Label Manager, Berliner Philharmoniker Recordings
“Elaborate physical products, sold
via the right channels to the devoted
fans of the orchestra: that is the
strategy that has worked best for us.”
Another label that is finding success
through both physical and digital
means is German jazz label ACT.
Just for new frontline albums
released so far in 2018, it has
sold more than 120,000 physical
editions, 7,000 downloads and
done more than 8m streams.
“The strategy is to combine offline
activities like public relations,
advertisements, point-of-sale
marketing, price campaigns with retail develop profiles and strategies on all
partners and special formats, with
narrow online campaigns designed
for specific target groups,” says
managing director Andreas Brandis.
Those online campaigns range from
Facebook & Instagram advertising
and videos to YouTube marketing,
SEO activities and online raffles,
adds Brandis, noting that ACT
has been producing much more
video content for these online
campaigns in 2018. Both marketing
channels are important.
“We still have a lot of ‘physical’
customers and they need to find our
new releases in traditional marketing
channels. Beyond that there are a lot
of young artists on our roster and of
course established artists looking for
new audiences, we need to build and
important online platforms,” he says.
“Streaming is growing, but for our
niche it can’t compensate what was
lost in physical and download over
the last years. Streaming delivers
important income, but only for
huge catalogues can it create a
value which is sufficient to finance
a company,” says Brandis.
47
“That’s one of the major challenges
for all small or middle companies.
One trend is still that a lot of
music lovers buy CD and vinyl.
That helped our success.”
For a label like ACT, international
success isn’t just about new platforms,
but is about expanding the services
it offers to its artists, as they target
ever-more-global fanbases. “With all
our experience and knowledge we will
continue to be a sparring partner for
our artists and extend our business to
management and concert promoting.”
South African label Gallo Record
Company has seen streaming
services provide some of its
artists with a way to reach new
fans around the world – and help
them play to larger audiences.
48
Jeremy Loops released his album
Critical As Water this year, for
example. “Outside of South Africa,
the album has done 12 million
streams on Spotify and seven
million on Apple Music,” says Rob
Cowling, general manager at the
label. “He is South Africa’s most-
streamed male artist in Spotify.”
Loops is now regularly touring
Europe and the US, with Australia
and Germany proving strong markets
too. He’s already got one of London’s
premier venues, the O2 Academy
in Brixton, booked for November
2019 – as part of a European tour
playing to nearly 35,000 fans in total.
Cowling lists other successes for
the label, from Paxton – who has
performed in Russia and Sweden, and
is already eliciting interest from US
talent agencies – to Wonderboom, who
won the top award after competing
against acts from 14 other countries
at the Silk Road Indie Music Festival
in Chengdu, China. Josh Wantie
(via a collaboration with French
electronic duo FDVM) and veteran
act the Parlotones have also been
winning new fans abroad in 2018.
Charlie Cunningham British Artist
Great live shows are a key part of “He just passed 120 million streams
this, of course, but Cowling says in total, and has more than 1.9
that the label has worked hard to million monthly listeners on Spotify,”
support its artists with the right says founder Magnus Bohman.
kind of marketing. “It’s a digital
Supporting this success? “A very
strategy that has heavily focused on
strong PR setup. Our distribution
social media, and then moved over
did a very good job, and on top of
to YouTube and building a working-
that a well-oiled collaboration with
relationship with influencers that then
Charlie’s management. We really
rolled out into conventional record-
worked well together,” says Bohman.
marketing campaigns,” he says.
“Streaming services like Spotify
“Our main focus has always been
helped us a lot. Getting on all of those
at home, and the strength of the
playlists at the same time Charlie was
African catalogue and projected
out playing live all over the world plus
continental growth,” adds Cowling.
doing PR at the same time. Charlie
“We do, however, plan to unlock much
has converted many of the playlist
untapped revenue through re-issues
listeners into his own fans now.”
and archive material worldwide.” And
like many independent labels, Gallo Bohman says that the success
is flexible in its dealmaking and with so far in 2018 has given Dumont
carve-outs should its artists want to Dumont more confidence to
pursue global opportunities that arise. invest in more artists.
Another label with a healthy
international case study is Dumont
Dumont in Sweden, with British
artist Charlie Cunningham.
WINTEL
TODAY’S
A VIEW FROM MARK DOWLING,
ABSOLUTE, A LABEL SERVICES
COMPANY, ON TODAY’S INDIE HIT
INDIE HIT
MAKERS AND WHAT MAKES A GOOD
MUSIC ENTREPRENEURS IN 2018.
MAKERS
TODAY’S BEST MUSIC ENTREPRENEURS 2. THEY RECOGNISE THEIR LIMITS
SHARE THESE 4 QUALITIES: Much can be achieved by a skeleton
1. THEY PLAY TO THEIR STRENGTHS
It’s well documented that the
major labels simply don’t have the
confidence and freedom to take the
kind of risks they once did. For young
upcoming artists and established
returning acts alike, more and
more, labels want to see a strong
finished product before they’re
willing to draw up a contract.
This has meant that A&R duties are
increasingly being left to others.
And it turns out there are a lot of
natural A&R men and women in the
music industry (see Steps panel).
49
WRITTEN BY MARK DOWLING
staff or an industrious individual,
however the most successful indie
hit-makers realise that to meet a
great record’s true potential, they
need a team of experts around them.
Many artists, managers and smaller
indie labels are turning to label
services not just because the model
works without putting copyrights up
for grabs, but because they are able to
quickly plug into an established team
of experts in every sector and genre.
Through label services, individual
executives and small operations
are able to quickly enhance their
workforce with a team that’s made
to order depending on the precise
needs of their specific campaigns.
The best music entrepreneurs
recognise that they need help but,
most importantly, they need the
right kind of help. The skillset and
experience that’s needed to put
together a successful campaign
for a returning heritage act is very
different to that of a new artist
on the grime scene. They need
a business model that allows
them to be nimble and flexible.
50

“THE BEST MUSIC ENTREPRENEURS

RECOGNISE THAT THEY NEED HELP
BUT, MOST IMPORTANTLY, THEY
NEED THE RIGHT KIND OF HELP. ”
MARK DOWLING
ABSOLUTE

3. THEY KEEP THEIR With this new micro-business

approach, keeping costs under
OPERATIONS LEAN control is crucial. Where major
The label services model also allows corporations have the luxury of being
for control and flexibility when it able to sustain bulging departments
comes to overheads—something of pluggers, promo execs, marketers
which is crucial for the modern-day and every other auxiliary role a
breed of music entrepreneur. Acts now campaign might need all year
rely on a multitude of different revenue round, those running a smaller
streams and year-round activity rather operation need to work differently.
than building everything around an Understanding the importance of
album and riding the ebb and flow of building upon their resources when
that cycle. And, again, it’s increasingly the time is right and then paring down
the artist and the team that sit at again when the added infrastructure
the centre, with direct control over is no longer needed is crucial to long
every aspect of that business. term financial success. Without that
ability to plug into outside expertise
on a flexible basis, many indie music
entrepreneurs would be financially
crippled by structural bulk that is
unnecessary most of the time.
WINTEL 51

4. THEY ARE REACTIVE That kind of approach is at odds with For example, if you land a spot on
the way artist, management and label Graham Norton, you may want to
AT THE RIGHT TIME partners like to work. They want to quickly allocate more resource to
That adaptability is also critical when start with a realistic target and build TV advertising following the show
it comes to campaign strategy itself. a bespoke campaign that is costed to bolster the appearance. If your
Because of the corporate structure, appropriately. Then, when things start strategy and spend has been fixed well
major label bosses are constantly working and taking off, they want the before the album campaign has even
having to satisfy shareholders, flexibility to build upon that initial plan begun, then you may not be able to
which often results in inflated sales and add to the budget accordingly. make the most of such opportunities.
projections and budgets set in
stone at an early date, way before
there’s any evidence to suggest how
an album will sell in reality. Any
experienced music executive will
testify how quickly initial predictions
usually go out the window…
52
Steps
In common with many of the truly
independent distributors and labels
services companies, at Absolute
Label Services, we’ve had the
pleasure of working with some of
the most creative, driven and savvy
artist managers and indie label
executives in the business today.
Take Fascination’s Adam Klein and
Peter Loraine. Absolute recently
worked with them to help Steps
secure a No.2 album with Tears On
The Dancefloor earlier this year.
It was certainly a successful
campaign—one spearheaded
by management and Steps
themselves—but the task was
made that much easier by having a
great set of songs to work with.
Fascination played a significant A&R
role in the making of the album,
bringing amazing writers on board, as
well as formulating a plan that would
mean that the album was self-funded
and control stayed with the creators.
Fascination could have carried
on alone and tried to kick-off the
campaign themselves. Thanks to
the digital revolution, the entire
route to market—from promotion to
distribution to retail—can in theory
be coordinated and executed from a
single laptop. But that’s not what they
did. We were delighted to be able to
help by providing all the services to
ensure a fantastic result for the band.
WINTEL 53

CHECKLIST FOR A DISTRIBUTION/LABEL SERVICES DEAL:

1. ASSETS BELONG TO… 3. BREAKAGE FROM DSPS 5. ARE DSP TERMS

From artwork to audio to WILL BE DISTRIBUTED NEGOTIATED WITH THE CLIENT
metadata, establish who the TO THE CLIENT? AT THE FOREFRONT?
assets required for digital
Is the contractual position on Are the terms of agreement
distribution belong to? If the
breakage from digital service between DSPs and distributor
decision is made to move
providers (where platforms pay or aggregator negotiated with
distribution companies, can
out a lump sum of money that the artist and label clients’
those assets be easily and
cannot be allocated specifically) best interests in mind?
affordably transferred, in DDEX
clear? If breakage is received,
or another standard format?
will this be shared with the
client, and on what basis?

2. DATA TRANSPARENCY 4. PAYOUTS FROM DSP IPOS WILL

Is full data transparency across BE DISTRIBUTED TO THE CLIENT?
all services available? Can
If a DSP goes public (e.g.
clients view and understand
Spotify), is the position clear on
their full earnings from one
how any monies received from
platform to the next as close
shares will be distributed?
to real time as possible?

“ANY EXPERIENCED MUSIC

EXECUTIVE WILL TESTIFY HOW
QUICKLY INITIAL PREDICTIONS
USUALLY GO OUT THE WINDOW…”
MARK DOWLING
ABSOLUTE
54

CONCLUSIONS

WRITTEN BY ALISON WENHAM

The third WINTEL report demonstrates There is much to learn from each
the increasing power, authority and other, and WIN will be on hand to
influence of the independent sector. help, advise, provide and connect, as
After twenty years building the sector we have been over the last ten years.
from being fragmented and disunited In these markets, even the definition
to one of global authority, the creationof an independent changes from one
of AIM, IMPALA, A2IM, AIF, Merlin country to the next, but what is clear
and WIN are all examples of what is that, definitions aside, there is a
can be achieved when we unite.  clear, simple and compelling desire
to work together and achieve the
What we rather patronisingly currently
best our artists deserve, and in an
label the Rest of the World (ROW) will,
environment that is transparent, fair
I am confident, become economic
and supportive of those principles. 
powerhouses in their own right in
the future, and WIN’s role will be What is also clear is that the work
all-important in uniting and building WIN has done in defending and
the Trade Associations of the future upholding the value of our rights
in those territories. They are, of has been very successful. No
course, not new in terms of music, longer is the sector regarded as
just new to the western markets an afterthought, it is counted as a
and vice versa. With You Tube’s most valuable and significant contributor to
popular videos coming from Brazil this the success of the supply chain and
year, it is a sure sign of the future.  at the heart of diversity and choice
for the consumer. As music discovery
and global diversification takes the
industry further and further away
from the controlled environment of
hit making and towards consumer
driven discovery, our sector will
continue to thrive and prosper as
it produces the most exciting and
diverse music in the world.
WINTEL
METHODOLOGY
IN ORDER TO MEASURE THE SIZE OF
THE GLOBAL INDEPENDENT RECORD
LABEL MARKET WE UTILISED TWO
KEY TOOLS:
GLOBAL INDEPENDENT
LABEL SURVEY:
During 2018 WIN and MIDiA fielded a
major survey to independent record
labels across the globe. The survey
addressed issues including the size
of the business, releases and genres,
people employed, A&R spend, use of
distributors, details of distributors
and rates paid to them etc. It also
included detailed questions about
label revenue, across all formats,
in volume and revenue terms.
Questionnaires were distributed to the calculating national market shares of
labels by local trade associations and
were returned directly to MIDiA for
analysis. The results present unique
picture of the global independent
label market and acted as a key
input for the market share model.
GLOBAL MARKET SHARE MODEL:
The first stage of the model entailed
establishing total recorded music market non-major record label market share
values (i.e. including major label revenue) figures for each country and additionally
by product format at country level using
national trade association and IFPI data.
After this, independent label data from
the survey was aggregated up to a
country level and fed into the model
at a product level by country.
55
WRITTEN BY MARK MULLIGAN
This enabled us to utilize invaluable
country level insight without revealing
any confidential, company level detail.
As an additional step compared to
previous editions, we factored in Artist
Direct (i.e. DIY Artist) revenue. To do this
we took the Artist Direct revenue that
MIDiA had previously identified and
stripped out the portion that may already
be tracked by the IFPI via streaming
service reports. This was then added to
the independent label revenue as part of
the non-major revenue. Additional
factors that we utilized in the modelling
process included, but were not limited to:
individual labels, identifying what share
of sales that were domestic, measuring
sales via distributors, analysing
distributor revenue shares and splitting
this by domestic versus international.
MIDiA additionally leveraged national
independent label market data from
local trade associations and other bodies.
All of these inputs were used to create
for each product category within each
country. To ensure that there was no
double counting of revenue, international
revenue for each label was only counted
as overseas revenue and was
appropriately attributed to respective
international markets. The resulting
interim dataset was then reviewed by a
mix of leading independent labels,
trade associations and other bodies.
56

MODEL
DATA
WRITTEN BY MARK MULLIGAN

Total Recorded Music Revenue ($ Million) Total Recorded Music Revenue Share
Total Market Majors Independents Majors Independents
US 5,950 3,664 2,286 US 62% 38%
Canada 440 332 108 Canada 75% 25%
Belgium 122 81 41 Belgium 66% 34%
Denmark 138 111 27 Denmark 80% 20%
Finland 80 59 21 Finland 74% 26%
France 929 637 292 France 69% 31%
Germany 1,330 894 436 Germany 67% 33%
Italy 249 175 74 Italy 70% 30%
Netherlands 271 176 94 Netherlands 65% 35%
Norway 139 106 33 Norway 76% 24%
Spain 206 175 31 Spain 85% 15%
Sweden 200 150 50 Sweden 75% 25%
UK 1,315 1,012 303 UK 77% 23%
Argentina 131 93 38 Argentina 71% 29%
Brazil 298 184 114 Brazil 62% 38%
Chile 42 27 15 Chile 65% 35%
Australia 415 277 138 Australia 67% 33%
Japan 2,754 1,008 1,746 Japan 37% 63%
South Korea 501 83 418 South Korea 17% 83%
Other markets 1,862 1,199 663 Other markets 64% 36%
Global Total 17,372 10,443 6,930 Global Total 60% 39.90%
WINTEL 57

Physical Recorded Music Revenue ($ Million) Physical Recorded Music Revenue Share
Total Market Majors Independents Majors Independents
US 906 627 279 US 69% 31%
Canada 91 69 22 Canada 76% 24%
Belgium 40 27 13 Belgium 68% 32%
Denmark 10 8 1 Denmark 85% 15%
Finland 9 7 1 Finland 88% 12%
France 339 251 88 France 74% 26%
Germany 574 382 192 Germany 67% 33%
Italy 96 72 24 Italy 75% 25%
Netherlands 60 34 26 Netherlands 57% 43%
Norway 13 9 4 Norway 70% 30%
Spain 53 46 6 Spain 88% 12%
Sweden 20 16 4 Sweden 80% 20%
UK 402 315 88 UK 78% 22%
Argentina 11 7 4 Argentina 62% 38%
Brazil 16 10 6 Brazil 60% 40%
Chile 5 3 1 Chile 68% 32%
Australia 78 55 23 Australia 70% 30%
Japan 2,008 741 1,267 Japan 37% 63%
South Korea 186 13 173 South Korea 7% 93%
Other markets 331 261 70 Other markets 79% 21%
Global Total 5,246 2,953 2,293 Global Total 56% 43.70%

Download Revenue ($ Million) Download Revenue Share

Total Market Majors Independents Majors Independents
US 944 594 350 US 63% 37%
Canada 80 60 20 Canada 75% 25%
Belgium 10 7 3 Belgium 67% 33%
Denmark 4 3 1 Denmark 83% 17%
Finland 1 1 0 Finland 76% 24%
France 40 26 15 France 64% 36%
Germany 114 81 33 Germany 71% 29%
Italy 16 11 5 Italy 69% 31%
Netherlands 8 5 3 Netherlands 64% 36%
Norway 3 0 3 Norway 9% 91%
Spain 7 5 1 Spain 80% 20%
Sweden 3 2 1 Sweden 77% 23%
UK 146 113 33 UK 77% 23%
Argentina 1 1 0 Argentina 63% 37%
Brazil 5 3 2 Brazil 65% 35%
Chile 1 0 1 Chile 35% 65%
Australia 75 51 25 Australia 67% 33%
Japan 278 101 176 Japan 37% 63%
South Korea 9 1 7 South Korea 14% 86%
Other markets 110 67 43 Other markets 61% 39%
Global Total 1,854 1,131 722 Global Total 61% 39.00%
58

Streaming Revenue ($ Million) Streaming Revenue Share

Total Market Majors Independents Majors Independents
US 3,372 1,888 1,484 US 56% 44%
Canada 201 145 55 Canada 72% 28%
Belgium 34 21 13 Belgium 62% 38%
Denmark 73 57 16 Denmark 78% 22%
Finland 42 27 15 Finland 64% 36%
France 270 154 116 France 57% 43%
Germany 355 243 112 Germany 68% 32%
Italy 74 51 23 Italy 69% 31%
Netherlands 127 85 41 Netherlands 67% 33%
Norway 95 80 15 Norway 85% 15%
Spain 92 74 17 Spain 81% 19%
Sweden 141 104 37 Sweden 74% 26%
UK 501 382 119 UK 76% 24%
Argentina 39 24 15 Argentina 61% 39%
Brazil 163 94 69 Brazil 58% 42%
Chile 22 14 8 Chile 62% 38%
Australia 205 129 75 Australia 63% 37%
Japan 265 83 182 Japan 31% 69%
South Korea 282 33 249 South Korea 12% 88%
Other markets 1,009 610 399 Other markets 60% 40%
Global Total 7,361 4,301 3,061 Global Total 58% 41.60%

Total Digital Revenue ($ Million) Total Digital Revenue Share

Total Market Majors Independents Majors Independents
US 4,451 2,557 1,894 US 57% 43%
Canada 285 208 76 Canada 73% 27%
Belgium 45 28 17 Belgium 63% 37%
Denmark 77 60 17 Denmark 78% 22%
Finland 43 28 15 Finland 65% 35%
France 318 185 133 France 58% 42%
Germany 472 327 146 Germany 69% 31%
Italy 90 62 28 Italy 69% 31%
Netherlands 135 91 44 Netherlands 67% 33%
Norway 98 75 23 Norway 77% 23%
Spain 101 82 19 Spain 81% 19%
Sweden 144 107 38 Sweden 74% 26%
UK 652 499 153 UK 77% 23%
Argentina 41 25 16 Argentina 61% 39%
Brazil 179 104 75 Brazil 58% 42%
Chile 24 16 8 Chile 65% 35%
Australia 283 208 75 Australia 73% 27%
Japan 574 198 376 Japan 35% 65%
South Korea 294 35 259 South Korea 12% 88%
Other markets 1,118 655 462 Other markets 59% 41%
Global Total 9,424 5,549 3,876 Global Total 59% 41%
WINTEL 59
60